What is a decisive victory?

 In some industries, it is possible to achieve what marketers call a “decisive victory.” This is when a company is able to have a competitive advantage that it substantially influences the pace of the industry. An example is how enterprise car rental is able to have car rental rates that are more lower then local competitors due to their economies of scale. They are able to purchase cars at a discount, and pass those savings on to customers via deals and promotional offers. This forces smaller local players to focus on either “high risk type of clients” or on “low-margin type of clients such as insurance rentals.”

Economies of Scale and Marginal Advantage

In most cases this advantage is achieved through economies of scale. Otherwise, it is normally achieved by having a “marginal-advantage.” A marginal advantage is when your competitive advantage is able to give you a profit ratio or profit amount that is significantly higher then your competitor.  

How do you achieve an decisive victory?

  1. Identify competitive advantage: This is achieved by first identifying a competitive advantage. Sometimes its very visible, and it is something that can be planned and prepared. Other times it is simply an anomaly and it occurs by happenstance.
  2. Exploit competitive advantage: You would then set up your business processes in a way to leverage and scale this advantage until you have either an advantage; advantage either in: “price or differentiation”
  3. Achieve decisive victory: after you’ve scaled your processes and you’ve now have a sustained advantage, you want to use this to influence suppliers, distributors, and customers.
  4. Reinvest, Repeat, and Reinvent: With the new profits, you want to reinvest them into your competitive advantage. This means improving your business process further. Repeat and reinvent refers to finding new competitive advantages that you could exploit.  

 

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